Will solar panels really increase the value of your home in 2024?
Solar panels have been proven to reduce your electricity bills, but do they also increase the value of your home?
SolarReviews' 2024 Solar Home Value
Study found that
homes with solar panels cost, on average, about 6.8% more than homes without
solar.
However, how much
solar panels increase the value of your home depends on several factors. In
some cases, solar panels may not increase the value of your home at all! Let's
look at how solar panels can affect the value of your home.
How much will the
value of my home increase if I install solar panels?
According to a 2024 study by experts
at SolarReviews, homes
with solar energy systems installed will, on average, achieve a 6.8% higher
sales price than homes without these systems. This is up from the 4.1% figure found by Zillow in a 2019 study.
being around $417,000 in 2024 , solar panels could increase the value
by over $28,000!
Keep in mind that
every home is different and that different factors will affect how much solar
panels will increase the value of your home.
Find out how much
solar panels are worth in your area
What factors
determine how solar panels affect the value of my home?
When it comes to solar
panels, no two homes are the same. That goes for home value too. Here are some
factors that can affect how much value solar panels add to your home.
Location
Where you live in the
United States can significantly affect the value of your home when you install
solar panels. The region, state, and even the city you live in can make all the
difference.
For example, our study found that homes with solar panels in Seattle, Washington State, sold for an incredible 9.3% more on average, representing the highest increase in home value.
It's important to note
that installing solar panels does not guarantee an increase in home value.
We've found that solar homes in Wisconsin sell for less than homes without
solar.
California, a popular
state for residential solar energy, saw a 5.4% increase in value.
system size
A larger solar system
requires more solar equipment and results in greater savings on your electric
bill. That said, a large solar power system can increase the value of your
home.
The average size of a
solar system is about 6 kilowatts (kW), but some homes may need much larger
systems. Your home's electricity use , the amount of sunlight your home receives,
and the wattage of the solar panels you use all play a role in how many solar panels you need .
condition of the
solar system
Solar panels are built to last 25
years or more before
they start to noticeably degrade. If you try to sell your home with a system at
the end of its life, your appraisal value may be lower.
In addition to the age
of your system, its condition also affects its value. Regular maintenance and upkeep of solar
panels can keep your solar system in optimal working condition. In addition, high-quality solar systems from leading solar panel brands last
better over time and ensure access to a reliable solar warranty to cover defects, which helps maintain the
value of a system.
electricity prices
Another great benefit
of having a solar powered home is that you can reduce your energy costs and
save money.
According to the 2024 REALTORS
& Sustainability report from the Nation Association of REALTORS research group, 44% of
homebuyers considered utility costs an important factor to consider in the
buying process, and 57% of real estate agents found advertising a home's
energy-efficient features to be somewhat valuable.
A home with solar
panels may be more attractive to a potential buyer because of the low energy
costs. Buyers in areas with particularly high electricity prices, such as New
York or Massachusetts, may be willing to spend a little more for long-term
energy savings.
Own vs. rented
solar system
There are several ways to pay for solar energy
. You can buy your
solar power system with cash or finance it through a solar loan, solar lease or
power purchase agreement (PPA).
The selling process
might be more difficult if you own a third-party owned system
through a solar lease or PPA . Potential buyers may be hesitant to
take on a monthly solar payment as an additional responsibility.
Because the solar
system is not owned by the homeowner and the savings from solar energy are not
as significant, it may not increase the overall value of the home as much as a
system paid for with cash or a solar loan .
Calculate how many
solar panels you need to power your home
Do solar panels
increase my property taxes?
While solar panels
increase the resale value of your home, they may also increase your property
taxes.
Based on the
average home value in the U.S., homeowners can expect solar panels to increase
their annual property taxes by $160 to $630 . But as with most things in solar, everyone's situation is different!
The actual property tax increase will depend on where you live, the added value
of your home, and the solar system you install.
Property tax
exemptions are offered in select states as an incentive for using solar energy . This will prevent your property taxes from
increasing when you add solar to your home. Currently, 29 states offer property
tax exemptions. To see if your state is one of them, check out our full list of states currently
offering tax exemptions in 2024.
Conclusion: Do
solar panels increase the value of my house?
Most homeowners can
expect that installing solar panels will increase the value of their home,
resulting in a higher selling price.
The average U.S.
home with solar panels will be worth about 6.8% more in 2024 than a home
without solar panels. However,
this value may be higher or lower depending on your location, local electricity
prices, the condition of your solar system, and whether you own or lease your
panels.
Ultimately, it's
important to remember that increasing property value isn't the only benefit of solar
energy . There are many more reasons why going solar is worth it. Solar
energy has become more affordable through the federal solar tax credit , net metering, and other local solar
incentives . Not to
mention, it's a great investment in a clean energy source that can help you
reduce your carbon footprint!
Find out how much
you can save on your electricity bill with solar panels
Solar systems and
real estate value: FAQ
Will adding a solar
battery affect the value of my property?
If you live in a state
without true net metering policies, solar batteries can help you lower
your electricity bill even further.
A study by the National Renewable Energy
Laboratory (NREL) found
that lower electric bills can increase property values. If that's true, a solar
battery coupled with your solar system could increase the value of your
property. However, this will likely vary on a case-by-case basis.
Battery storage can
also provide backup power to your home in the event of a power outage or
blackout during a storm, something homebuyers may be willing to pay a little
extra for.
Will my property
value increase if I finance my system with a solar loan?
Solar panels can
increase the value of your home even when financed with a loan. The original homeowner will typically pay off
the remaining balance of the solar loan when selling. While loans could be
passed on to a new buyer, this is not a common practice and can lengthen the
selling process and require negotiation.
Is it difficult to
sell a house with solar panels?
Selling a home with
solar panels is easy, especially if the panels were purchased with cash or
credit, as many homeowners value the low electricity costs and environmentally
friendly benefits of solar.
However, selling a
home with solar panels that was financed through a solar lease or PPA could
complicate the selling process. The problem is that these financing options
come with long-term contracts. When you sell your home, you'll either have to
buy out the contract or transfer it to the new owner. This could scare off a
potential buyer who isn't willing to take on a monthly solar payment.
Is it a good idea
to buy a house with solar panels?
If you are
specifically looking to buy a home with solar
panels , we recommend
that you check all of the following boxes before making your decision:
- The solar system is owned by the buyer and
is fully paid off.
- The solar modules are in optimal operating
condition considering their age.
- Double check that the roof for the panels
is in good condition.
- Research the solar company that installed
the panels and make sure they are still in business!
Be sure to ask if the
solar panels are leased. If so, you may have to assume a solar payment when you
purchase the home or negotiate a termination of the contract.
Will I still
receive rebates and incentives if I purchase a home with solar panels?
When you purchase a
home with solar panels, you will not receive any upfront rebates or tax
credits; the previous owner
has already received these payments.
However, you are
eligible for your utility's net metering benefits and may be eligible for other
performance-based incentives such as SRECs . You must transfer these performance-based
incentives into your name when purchasing a solar-powered home.